Correlation Between Sports Toto and Kossan Rubber
Can any of the company-specific risk be diversified away by investing in both Sports Toto and Kossan Rubber at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sports Toto and Kossan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Toto Berhad and Kossan Rubber Industries, you can compare the effects of market volatilities on Sports Toto and Kossan Rubber and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sports Toto with a short position of Kossan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Toto and Kossan Rubber.
Diversification Opportunities for Sports Toto and Kossan Rubber
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sports and Kossan is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sports Toto Berhad and Kossan Rubber Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kossan Rubber Industries and Sports Toto is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sports Toto Berhad are associated (or correlated) with Kossan Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kossan Rubber Industries has no effect on the direction of Sports Toto i.e., Sports Toto and Kossan Rubber go up and down completely randomly.
Pair Corralation between Sports Toto and Kossan Rubber
Assuming the 90 days trading horizon Sports Toto Berhad is expected to under-perform the Kossan Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Sports Toto Berhad is 1.44 times less risky than Kossan Rubber. The stock trades about -0.2 of its potential returns per unit of risk. The Kossan Rubber Industries is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 214.00 in Kossan Rubber Industries on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Kossan Rubber Industries or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Toto Berhad vs. Kossan Rubber Industries
Performance |
| Timeline |
| Sports Toto Berhad |
| Kossan Rubber Industries |
Sports Toto and Kossan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Toto and Kossan Rubber
The main advantage of trading using opposite Sports Toto and Kossan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Toto position performs unexpectedly, Kossan Rubber can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kossan Rubber will offset losses from the drop in Kossan Rubber's long position.| Sports Toto vs. Carlsberg Brewery Malaysia | Sports Toto vs. Alliance Financial Group | Sports Toto vs. Press Metal Bhd | Sports Toto vs. Impiana Hotels Bhd |
| Kossan Rubber vs. Kawan Food Bhd | Kossan Rubber vs. Kluang Rubber | Kossan Rubber vs. K One Technology Bhd | Kossan Rubber vs. Daya Materials Bhd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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